CHILCHINBETO COMMUNITY SCHOOL INC.Tribal Government

SECTION II ? FINANCIAL STATEMENT FINDINGS 2022-001 Internal Control over Financial Close and Reporting (Material Weakness) ? Modified and Repeated (Prior Year Finding 2021-001) Condition: Account reconciliations were not performed timely and/or did not agree to the general ledger when performed. Accounts Payable and Accrued liabilities There were unsupported accounts payable and accrued liabilities balances for the School at year-end. The School lacks controls to ensure that accounts payable and accrued payroll liabilities are reconciled during the year or at year-end. During our review of the search for unrecorded liabilities and general disbursements, we noted cut-off exceptions for 7 out of 15 disbursements tested, totaling $122,874, the School booked expenses related to the current year in the next fiscal year. Fund Balance The School has recorded adjustments to correct ending balances for these accounts. Criteria: The School is responsible for maintaining adequate internal controls over its accounting records, account balances, and financial statement disclosures. Accounting records should include a complete, balanced general ledger that records all transactions that is supported by appropriate subsidiary records so that accurate financial statements can be prepared. Procedures should be in place to ensure that balance sheet accounts are independently reviewed and reconciled to the subsidiary records in a timely and effective manner. Cause: There was a lack of established internal controls and processes over the financial reporting process to ensure timely and accurate financial reporting. Effect: Without established and adequate internal controls and reconciliation procedures, the School?s balances lack certainty about the accuracy of the balances. Also, the probability that fraud or material errors will occur and go undetected generally increases. Auditor's Recommendation: We recommend management evaluate all aspects of the financial close and reporting process as well as the account reconciliation process and establish adequate internal controls and procedures to ensure timely and accurate financial statements and supporting schedules and to ensure timely compliance requirements are met. View Of Responsible Officials: The School agrees with this finding and has a plan in place to correct this.

Condition: During our test work over special tests and provisions, we noted that employee background investigations were outdated. Criteria: The Indian Child Protection and Family Violence Prevention Act (25 USC 3201 et seq.) requires Indian tribes and tribal organizations that receive funds under the ISDEAA or the Tribally Controlled Schools Act to conduct an investigation of the character of each individual who is employed or is being considered for employment by such Indian tribe or tribal organization in a position that involves regular contact with, or control over, Indian children. The Act further states that the Indian tribe or tribal organization may employ individuals in those positions only if the individual meet standards of character, no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63), as the Indian tribe or tribal organization establishes. Cause: Turnover with School personnel led to a lapse in the required performance and documentation of background investigations. Effect: The School is not in compliance with the special tests and provisions requirements. Auditor's Recommendation: We recommend that the School ensure that employees follow the policies and procedures that are in place along with the compliance requirements for the Indian School Equalization Program and ensure that the compliance requirement is being followed. Views of Responsible Officials: The School agrees with this finding and has a plan in place to correct this.

CHILCHINBETO COMMUNITY SCHOOL, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2020 Section III Findings and Questioned Costs RELATED TO FEDERAL AWARDS 2020 002 Reporting (Significant Deficiency) Federal program information: Funding Agency: U.S. Department of Interior Title: Administrative Cost Grants for Indian Schools CFDA number: 15.046 Award year: 01/07/2019 06/30/2020 Condition: The school did not submit their required Federal Financial Report (SF 425) for the second, third and fourth quarters of the program year within the required 30 days after the end of each reporting period. Name of Program Grant Number Period Ending on Due Date Submitted Date Administrative Cost Grant for Indian Schools AADD33N02G 12/31/2019 01/30/2020 02/04/2020 Administrative Cost Grant for Indian Schools AADD33N02G 03/31/2020 04/30/2020 05/12/2020 Administrative Cost Grant for Indian Schools AADD33N02G 6/30/2020 07/30/2020 08/03/2020 Criteria: According to Uniform Guidance Compliance Supplement, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency. The submission of interim reports will be on a quarterly, semi annual, or annual basis, as directed by the Federal agency. Quarterly and semi annually interim reports shall be submitted no later than 30 days after the end of each reporting period. Questioned Costs: Unknown. Effect: Noncompliance with these requirements could potentially result in a reduction or discontinuation of program awards in future periods, and incorrect information may be included in amounts reported for federal programs. The school is not in compliance with the reporting requirements per grant contract. Cause: The school did not have adequate monitoring over the completion and submission of required reports. Recommendation: We recommend the school establish and implement policies and procedures for the creation, approval, submission and retention of all required reports. Management Response: SF 425?s Quarterly reports are due four times out of the year. 1st Qtr. are due on or before April 30, 2nd Qtr. are due on or before July 30, 3rd Qtr. are due on or before October 30, 4th Qtr. are due on or before January 30. Business Office has submitted the 425?s like ten days is the latest. Most of all, these were submitted during the pandemic. Business Office will be responsible for turning in reports on time. Anticipated Completion Date: FY 2020 2021 Responsible party: Business Office Manager, Angelita Clitso.

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